Chip EQUIP Act

This bill prohibits companies that receive U.S. semiconductor-related financial assistance from buying certain fully assembled semiconductor manufacturing equipment from foreign entities of concern or their subsidiaries. It amends existing law to define key terms and add new restrictions on how those funds can be used.

Sec. 2, Definitions: The bill adds a definition for 'completed, fully assembled' equipment, meaning all or nearly all parts are put together into a ready-to-use item. It also defines 'ineligible equipment' as fully assembled semiconductor manufacturing equipment made by a foreign entity of concern, listing specific types like deposition, etching, lithography, inspection, wafer slicing, dicing, wire bonders, ion implantation, chemical mechanical polishing, and diffusion or oxidation furnaces. Parts or subcomponents that enable such equipment are not considered ineligible equipment.

Sec. 2, Ineligible Use of Funds: The bill requires the Secretary to include in each agreement with a covered entity a prohibition on buying, installing, or using ineligible equipment for projects funded by federal semiconductor assistance. The Secretary may waive this prohibition if the equipment is not available in sufficient quality or quantity from the U.S. or allied countries, or if the equipment complies with export regulations and the Secretary, with intelligence or defense officials, determines the waiver is in the national security interest. This does not waive other restrictions on foreign entities of concern.

Sec. 2, Conforming Amendments: The bill updates cross-references in the Internal Revenue Code and the National Defense Authorization Act to align with the new definitions.